Sensex dives for second day running, Nifty entering short-term correction, support near 17390-17408

It was a day dominated by bears on Dalal Street as headline indices tanked for the second day running. S&P BSE Sensex dived 872 points or 1.46% to settle at 58,773 while the NSE Nifty 50 index tanked 267 points or 1.51% to end at 17,490. Among Sensex constituents, ITC gained 0.58% to end as the top gainer followed by Nestle India. All other Sensex stocks closed in the red, led by Tata Steel which was down 4.3%. Bank Nifty was down 1.77% on the closing bell while India VIX zoomed 4% to close at 19.04.

Deepak Jasani, Head of Retail Research, HDFC Securities –

Also Read: Sensex, Nifty may hit new all-time highs by Diwali; Sanjiv Bhasin bullish on bank stocks | IIFL Interview

Om Mehra, Technical Associate, Choice Broking –

“As it closed below 17500, an important psychological level, the overall structure shows that the index is likely to witness more sell-off in coming days. OI Data indicates, on the call side the highest OI was witnessed at 17600 followed by 17800 strike prices while on the put side, the highest OI was at 17300 followed by 17000 strike price. On the other hand, Bank nifty has support at 37500 levels while resistance at 3900 levels. We advise traders to wait for a retracement around the nifty 17150 level before entering the market.”

Mohit Nigam, Head – PMS, Hem Securities –

“As investors anticipated a flood of U.S. data and Federal Reserve Chair Jerome Powell’s keynote talk on the economic and rate outlook, Asian markets are primarily trading in the red. As concerns over more aggressive interest rate increases from the Federal Reserve and the European Central Bank resurfaced, European stocks traded lower. On the technical front, immediate support and resistance in Nifty 50 are 17300 and 17800 respectively. Bank Nifty immediate support and resistance are 37700 and 38800 respectively.”

Also Read: Value stocks favoured, but some tech shares could do well; time now for long-term investment, says UBS

Rupak De, Senior Technical Analyst at LKP Securities–

“Nifty slipped back below the falling trend line, indicating a failed breakout. On the lower end, the price has corrected towards the support zone of 17500-17400. Over the near term, a fall below 17400 may trigger a further correction in the market. On the lower end, support is visible at 17200/17000. On the other hand, the Nifty may recover towards 17700 if it doesn’t fall below 17400.”

Vinod Nair, Head of Research at Geojit Financial Services –

“Consolidation was triggered in the market in anticipation of tighter monetary policy by the FED and worries over a slowdown in global economic activity. The current risk-reward is not favouring investors as the Nifty50 is now trading at a premium valuation of 21.5x P/E (1yr fwd basis), above the long-term average. The rising dollar index and higher US10 year bond yield act as the near-term headwinds for the market.”

Suman Bannerjee, CIO, Hedonova –

“Markets respond to liquidity and a lot of liquidity was sucked out today from the Indian markets by FIIs based out of Mauritius. Although there was some buying by US index funds it does not match up because index funds will normally buy towards the end of the day to have the lowest slippage, while a discretionary seller will sell from the moment the bell rings.”